Poultry News

Polish Poultry Meat Processor to Double Output as Industry Grows

30 September 2015

POLAND - Polish poultry meat processor Indykpol has announced plans to spend about PLN 200 million (€47 million) in the next four years with the aim of raising its output capacity, reports Jaroslaw Adamowski.

By 2021, its capacities are expected to double, allowing the Polish company to exceed PLN 2.5 billion (€588.5 million) in annual revenues, according to Indykpol.

In the first phase of the planned investment, the processor is aiming to raise its capacity by 40 per cent by 2019.

“Based on the information that we have obtained from our shareholders, we can expect that a large majority of our profits in the forthcoming years will be allocated to investments,” Piotr Kulikowski, the chief executive of Indykpol, told local business daily Parkiet.

The latest announcement follows the release of the firm’s improved financial results. In the first half of this year, Indykpol managed to raise its sales to some PLN 591.6 million (€139.3 million) which represented an increase of about 7 per cent year-on-year, according to data released by the poultry meat processor.

In line with its higher revenues in the first six months of this year, Indykpol reported a net profit of PLN 14 million (€3.3 million) for the January-June 2015 period. This translated into a robust increase of 79 per cent year-on-year from PLN 7.8 million (€1.8 million) posted in the first six months of 2014.

While Poland's domestic demand for poultry meat is continuing to rise, and constitutes a driving force behind Indykpol's higher sales in the local market, the company is also eyeing increased exports to a wide range of countries.

This year, the firm is aiming to generate 25 per cent of its revenues from export sales, up from 20 per cent last year. In addition to the EU member states, some of the firm's major export destinations include China and Hong Kong.

Polish poultry industry on the rise

It is noteworthy that Indykpol unveils its expansion plans at a time when the country’s poultry meat industry is experiencing a period of solid growth. Poland’s consumption of poultry meat is forecast to reach about 28 kg per person this year, as shown by figures from the state-run Institute of Agricultural and Food Economics (IERiGZ). This would represent an increase of some 1.8 per cent compared with 2014.

The data suggests that poultry meat remains less popular than pork which dominates the country’s meat sales. Last year, the country’s pork meat consumption rose by 8.4 per cent to 38.5 kg per capita, compared with 35.5 kg per person a year earlier. In 2015, the country’s average pork meat consumption is expected to grow to 39.5 kg per person.

Last year, Polish poultry industry players produced 2.1 million tonnes, of which roughly 41.3 per cent was intended for export sales.

In the first half of 2015, local poultry industry entities further raised their exports, with foreign sales totaling 482,000 tonnes, up 15 per cent compared with the first six months of 2014, according to figures released by the country’s Agricultural Market Agency (ARR).

This said, the increase in Poland’s poultry meat export sales was accompanied by higher imports, with 429,000 tonnes of poultry imported by the Polish market, which translated into about €772 million, the state-run agency said in a recent market report. This represented an increase of 18 per cent and 20 per cent, respectively, compared with the January-June 2014 period.

Russian ban continues to have an impact

The EU member states remain a major foreign destination for Poland’s poultry meat exports, with Germany, the UK, the Czech Republic and France leading the way. As a result of the economic sanctions imposed on Russia by the West and the resulting halt in Russian meat imports from the EU, Polish poultry meat players have been forced to look for new export markets for their output.

The halt is also hampering efforts by Polish companies to expand to other Eastern European markets and the member states of the Russian-led Commonwealth of Independent States (CIS) which comprises post-Soviet countries.

Indykpol has been operating under its current name since 1991, but the company's history dates back to 1951, when the Polish state set up a meat processing entity in Olsztyn, in the country's northern part, where Indykpol is headquartered. The company has been listed on the Warsaw Stock Exchange (WSE) since October 1994, and it is privately-owned.

Some of the firm's products include sausages, hams, pates, frankfurters and other processed poultry meat items. In the domestic market, Indykpol owns 14 distribution centres in various regions of Poland, and its products are available at more than 10,000 retail outlets, according to data from the company.

Indykpol operates a number of subsidiaries in the Polish market. Among others, the group owns a feed production plant in Olsztynek, in northern Poland, and a meat processing plant in Swiebodzin, in the country’s western part. In addition to this, Indykpol owns a foreign-based offshoot in Russia’s Tatarstan region which produces feed and processes poultry meat.